With the increasing sophistication of cyber attacks due to AI capabilities, organizations that fail to prioritize effective preparation for potential data breaches face significant risks. Incident response involves taking actions and procedures during security breaches to mitigate data loss, respond swiftly, communicate with stakeholders, protect reputation, ensure compliance, and reduce breach costs. Many SMEs lack a well-prepared incident response strategy, often handling incidents like IT and security incidents. It is crucial for organizations to create detailed incident response plans, integrated with disaster recovery plans. The key is to differentiate incident response from disaster recovery plans, where the former focuses on handling security breaches, and the latter on restoring operational state after incidents. Employee training, analyzing environment needs, and preparing for various failure scenarios are essential elements of a robust incident response strategy. Common security threats like DDoS attacks, malware, ransomware, phishing, and insider threats require thorough planning to address effectively before disasters strike. Building effective incident response strategies involves a phased, continuous process customized to an organization’s needs, emphasizing data protection, regulatory compliance, and regular practice of incident scenarios for a well-prepared IT team.